States With the Lowest Property Tax Rates for Short-Term Rentals
Summary
This article discusses states with the lowest property tax rates for short-term rentals and emphasizes that focusing solely on property taxes can be misleading. Hosts should consider the overall tax burden, including lodging and sales taxes, and utilize tools like iGMS for comprehensive financial tracking to make informed investment decisions.
Key Insights
- •Short-term rental owners also have to think about lodging taxes, sales taxes, state income tax, and local rules set by city governments. Low property taxes don't always mean the lowest overall tax burden.
- •By 2026, short-term rental hosts in Hawaii can face a combined lodging tax burden of nearly 19% on booking revenue.
- •Property tax rates vary significantly by state, and choosing one of the states with the lowest property tax rates can mean keeping more money in your pocket every single year.
Action Items
- ✓Understand the full tax picture, including lodging taxes, sales taxes, and state income tax, when evaluating potential investment locations.Effort: mediumImpact: high
- ✓Research local rules and regulations including short-term rental limits, zoning restrictions, and licensing requirements.Effort: mediumImpact: high
Tools & Resources
- →iGMS: Successful STR investors look beyond property taxes alone and use tools like iGMS to track tax obligations, income, and performance across multiple properties and locations.
Common Mistakes
- ⚠Relying solely on low property tax rates without considering the total tax burden.
- ⚠First-time investors often get caught out when not accounting for lodging taxes, sales taxes, local tax rates, and business licensing fees.
More from Regulations & Compliance
Carson City, Nevada, is refining its short-term rental regulations. City supervisors are currently reviewing and modifying the local ordinance during a retreat. This review aims to address operational aspects, potentially impacting local hosts through new or revised rules, emphasizing compliance.
A 21-unit vacation rental in Dunedin, Florida, has been approved, signaling potential growth in the local short-term rental market. This approval could lead to increased accommodation options for tourists visiting the area. This news could also influence local regulations.
St. Louis aldermen have approved a short-term rental fee, though a legal battle over existing rules continues. This indicates a focus on regulating the STR market within the city. Hosts in St. Louis should be aware of these new fees, which may impact their profitability. Find out how this affects your STR business.
Curated by Learn STR by GoStudioM